It’s almost April, which means . . . taxes. If you haven’t done yours yet, you’re not alone. I gave up a day of writing to do mine yesterday, and the results were not good. I owe big-time, mostly due to money from sources other than my writing. But we’re all about writing here, so let’s talk about that.
In adding up my writing expenses, I was shocked to discovered that I had spent $610 on contest fees. Couldn’t be. I checked my numbers again. Yes, $610. I wrote about contests a few weeks ago and you can read that post by clicking here. Contests can be a great way to get discovered and win some money, but if you don’t win, all you get for your money is a completed manuscript and a copy of the journal sponsoring the contest. The fees have been steadily creeping up. A few are under $10, but most contest sponsors charge $15-$20 to enter one to three poems, a short story or an essay and $25 to $35 to enter a whole book. Some of the book contests I entered last year when I had a new book and was feeling flush charged $100. It’s like going to the casino, gambling that your twenty-dollar bet will win you a thousand bucks or more. It’s great if you win, but if you don’t, you might not have enough money to get home. Meanwhile, this is how the sponsors of the contests are paying their bills.
There are some free contests. Check http://www.freelancewriting.com/creative-writing-contests.php. And here’s a thought. Skip the contests and send your work in as a regular submission. Some journals are even charging for that now, $3 here, $5 there. Think twice about those. A successful magazine or newspaper should be able to make its money somewhere else besides charging its writers to submit their work.
As of now, I’ve decided to give my credit card a rest and avoid paying for contests. It’s up to you. I always tell people I don’t need to go to the casino to gamble; I’m a writer.
Meanwhile, if you haven’t done your taxes yet, don’t wait much longer. Remember, if you earned any money with your writing, you must declare it on your income tax forms, but you can offset it with your writing-related expenses. You are keeping track of what you spend, right? If not, start now. Write it down, keep the receipts and make it easy to fill out that Schedule C at tax time. And yes, contest fees are deductible. For a previous post on writers and taxes, click here.
As always, feel free to comment or ask questions.
I looked up after Christmas and realized it was almost THE END OF THE YEAR. Oh no! Suddenly my newsletter is due in a couple days, I have to pull my financial records together for my writing business, and if I don’t use my free lunch at Georgie’s by Tuesday, I’m going to lose it. Plus I have all my regular work to do and bills to pay when all I want to do is take a vacation, preferably someplace warm. My teacher friends have another week to relax, but I’m a writer and a musician. That means I’m self-employed and need to get my act together for a new year.
If you’re a writer or any kind of artist, you’ve got some work to do, too. It falls into two categories: closing out the old year and planning for the new year.
Closing out the old year:
Finances: If you make any money with your writing, you need to report it on your income tax. You can offset that income with your writing-related expenses, but only if you’ve kept track of them throughout the year. I hope you have. If not, start now. It doesn’t matter whether you do it by hand in a notebook, put the numbers in a spreadsheet, or use a program such as Quickbooks, but you need to keep records and keep your receipts. That way, if the IRS questions your return, you have the paperwork to back it up. While you’re at it, take a look at what you earned and what you spent. Is it out of balance? What can you do better next year?
Files: If you’re like me, the paper piles up and so do the computer files. Now is a good time to sort through it all. Put current projects close at hand. File or toss the rest. Clear the desk for a fresh start. It’s also a good time to purge unneeded emails and computer files.
Year-end report: Unlike big companies with stockholders and boards of directors, writers are not required to report to anyone about our year’s accomplishments, but it’s still a good idea to look back and see how you did. What did you write? What did you publish? How did you progress in your writing career? If you kept writing all year, consider your year a success.
Planning for the new year
Finances: Now is the time to buy a new ledger, start a new spreadsheet, or open a new file in your computer program to record your income and expenses for the new year. You might want to set a budget and income goals. Think about what you can do to spend less and earn more.
Setting writing goals: As you start the new year, what do you hope to accomplish in your writing in 2014? Will you finish that novel? Submit more articles? Start a blog? Take a class? Write it down and give yourself deadlines, then post your goals where you will see them every day.
Then . . . Go Write.
I have updated my resources page with more books and more links. Click on “Resources” above. If you find any errors or have additions to suggest, please let me know in the comments or at email@example.com.
Jan. 2 is the deadline to sign up for my online classes, listed under “Classes” above. I’m offering courses on blogging, columns, opinionated writing, and writing and selling freelance articles. If I don’t have enough signups by Thursday, the classes will not be offered this term.
Happy New Year to one and all!
Have you heard about Natalie Goldberg and her classic book Writing Down the Bones? If you haven’t read it, you should. Its stories and exercises will knock the blocks right out of your writing practice. So will her other books, like Old Friend from Far Away and Wild Mind. Meanwhile, she has a new book, The True Secret of Writing, coming soon. I heard her speak a couple years ago, and I was transformed. Visit her website at http://www.nataliegoldberg.com.
U.S. writers, our income tax deadline is only about two weeks away. If you have put it off, my previous posts on income tax may help you figure out how to handle the writing part of your tax forms. The key things you need to know: keep track of every penny you earn with your writing and every penny you spend. You are legally required to report your income, and your writing expenses are deductible. For advice, visit “Last Minute Tax Tips.”
You open the door and find an Easter basket on your front step. Except this basket contains something you would never expect the Easter Bunny to bring. What is it? Use your imagination to come up with a story or poem based on what’s in the basket, maybe what you wish was in the basket or what you’re afraid might be in the basket.
Now Go Write
Disclaimer: I’m not an accountant; I’m a writer, but my husband used to be a professional tax man and he taught me a lot.
I hope this blog is coming after the fact for most readers. I hope you have finished your tax returns, sent them in and collected your refunds by now. But if you haven’t, or you weren’t too happy with the results, here are a few words of wisdom.
If you make money with your writing, you are supposed to report it on your tax return. If you make more than $600 from any one publisher, they will be reporting it to the IRS, so you need to report the income. If anybody pays you royalties, they will also be sending a form to the IRS. Even if you don’t make much money, you should list your income, not only because it’s the right thing to do, but to show that you’re seriously working at your writing and so you can deduct your expenses.
If you’re writing for publication, you can claim your writing expenses on Schedule C, the form for small businesses like yours and mine. The things you can claim include: office supplies, Internet connection fees, postage, travel for interviews, tuition for classes and workshops, publications you buy for your business, contest entry fees, and more.
To verify these expenses, you need to keep receipts and keep records, either on paper or on the computer, for every work-related expense and every work-related mile you drive. It doesn’t have to be complicated, and it doesn’t have to take a lot of time, but you need to do it.
Note that most accountant types are not writers and don’t really understand our financial situation, so we have to be ready with clear records, whether we do our own taxes or pay someone else.
People often wonder if they can still deduct writing expenses if they’re not making a profit. The answer is yes. Ideally you should make a profit within three years, but if you don’t and you can show that you are working hard at it, that you have a “profit motive,” you should be all right.
For more tax advice, read Bonnie Lee’s Tax Advice for Writers at the writersdigest.com site. You might also want to get the Writer’s Pocket Tax Guide. Updated every year, it’s available as an e-book, if you’re in a hurry.
Good luck. Get it done, so you can hurry back to writing.